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Stocks Tumble Again as Fears of Coronavirus Grip Markets Stocks Tumble Again as Fears of Coronavirus Grip Markets
(about 1 hour later)
Worried investors continued to dump stocks Tuesday in response to the threat of the spreading coronavirus outbreak, as American officials warned that it was only a matter of time before the infection spreads to the United States.Worried investors continued to dump stocks Tuesday in response to the threat of the spreading coronavirus outbreak, as American officials warned that it was only a matter of time before the infection spreads to the United States.
A day after its worst one-day slide in two years, the S&P 500 was down nearly 3 percent by Tuesday afternoon, a decline that put the blue chip index firmly in the red for the year.A day after its worst one-day slide in two years, the S&P 500 was down nearly 3 percent by Tuesday afternoon, a decline that put the blue chip index firmly in the red for the year.
For weeks, American investors had largely shrugged off the economic risks of the virus even as it disrupted global supply chains and shut down factories in China. As recently as last Wednesday, the S&P 500 was at a record high. But since then, growing outbreaks in Europe and elsewhere in Asia have raised fears that the virus will continue to drag on the global economy.For weeks, American investors had largely shrugged off the economic risks of the virus even as it disrupted global supply chains and shut down factories in China. As recently as last Wednesday, the S&P 500 was at a record high. But since then, growing outbreaks in Europe and elsewhere in Asia have raised fears that the virus will continue to drag on the global economy.
Monday was the worst day for American markets since February 2018, with the S&P 500 falling 3.4 percent after officials in Italy and South Korea reported new infections.Monday was the worst day for American markets since February 2018, with the S&P 500 falling 3.4 percent after officials in Italy and South Korea reported new infections.
On Tuesday, the tumble continued. Declines in the S&P 500 were led by energy, industrial and materials shares, sectors of the market closely tied to Chinese demand for raw materials.On Tuesday, the tumble continued. Declines in the S&P 500 were led by energy, industrial and materials shares, sectors of the market closely tied to Chinese demand for raw materials.
Updated Feb. 25, 2020Updated Feb. 25, 2020
The sell-off accelerated after the Centers for Disease Control and Prevention warned Americans that they should brace for the likelihood that the coronavirus will spread to communities in the United States.The sell-off accelerated after the Centers for Disease Control and Prevention warned Americans that they should brace for the likelihood that the coronavirus will spread to communities in the United States.
“It’s not so much of a question of if this will happen in this country any more, but a question of when this will happen,” said Dr. Nancy Messonnier, director of the National Center for Immunization and Respiratory Diseases. “We are asking the American public to prepare for the expectation that this might be bad.”“It’s not so much of a question of if this will happen in this country any more, but a question of when this will happen,” said Dr. Nancy Messonnier, director of the National Center for Immunization and Respiratory Diseases. “We are asking the American public to prepare for the expectation that this might be bad.”
As stocks dropped sharply, investors moved into the safety of government bonds, pushing their prices up and yields down. The yield on the 10-year Treasury note fell to 1.31 percent, which would be a record low, a possible sign that investors expect growth in the United States to slow. As stocks dropped sharply, investors moved into the safety of government bonds, pushing their prices up and yields down. The yield on the 10-year Treasury note fell to a record low, a signal that investors expect growth in the United States to slow.
Investors could face more wild rides as the coronavirus outbreak spreads further, crimping consumer demand and snarling the world’s supply chains.Investors could face more wild rides as the coronavirus outbreak spreads further, crimping consumer demand and snarling the world’s supply chains.
“The emergence of a large number of new cases in Italy has materially increased the risk of a sharp drop in consumer and business confidence in Europe, and potentially North America too if more cases are confirmed there in the coming days,” Mark Haefele, the chief investment officer at UBS’s global wealth management operations, said in an investment report.“The emergence of a large number of new cases in Italy has materially increased the risk of a sharp drop in consumer and business confidence in Europe, and potentially North America too if more cases are confirmed there in the coming days,” Mark Haefele, the chief investment officer at UBS’s global wealth management operations, said in an investment report.
The growing outbreaks of the virus in Europe, Asia and the Middle East have stoked fears that its spread will be difficult to contain, and market analysts in recent days have issued new warnings that the outbreak could drag down economies around the globe.The growing outbreaks of the virus in Europe, Asia and the Middle East have stoked fears that its spread will be difficult to contain, and market analysts in recent days have issued new warnings that the outbreak could drag down economies around the globe.
Economists at JPMorgan Chase wrote that they expected global growth to slow to a 1 percent annual pace in the first three months of the year, which would be the weakest quarter of the economic expansion that is now more than a decade long. In the United States, the general estimate for first-quarter domestic growth has slipped.Economists at JPMorgan Chase wrote that they expected global growth to slow to a 1 percent annual pace in the first three months of the year, which would be the weakest quarter of the economic expansion that is now more than a decade long. In the United States, the general estimate for first-quarter domestic growth has slipped.
Markets around the globe have been affected this week.Markets around the globe have been affected this week.
Germany’s DAX and Britain’s FTSE 100 each fell nearly 2 percent on Tuesday, a day after European markets had their worst drop since 2016.Germany’s DAX and Britain’s FTSE 100 each fell nearly 2 percent on Tuesday, a day after European markets had their worst drop since 2016.
Shares also fell in most markets in Asia, led by Japan, which was closed for a holiday on Monday. The Nikkei 225 index tumbled more than 3.3 percent on Tuesday, although most other Asian markets fell at a much slower pace.Shares also fell in most markets in Asia, led by Japan, which was closed for a holiday on Monday. The Nikkei 225 index tumbled more than 3.3 percent on Tuesday, although most other Asian markets fell at a much slower pace.
South Korea, which is facing the world’s second-largest outbreak of the virus outside China, was the bright spot: Share prices rebounded on Tuesday morning after enduring one of the sharpest drops of any large market around the world the day before. They ended up 1.2 percent.South Korea, which is facing the world’s second-largest outbreak of the virus outside China, was the bright spot: Share prices rebounded on Tuesday morning after enduring one of the sharpest drops of any large market around the world the day before. They ended up 1.2 percent.
Stock markets in commodity-exporting countries continued to suffer losses as traders worry that demand for their goods may decline if more countries suffer the kind of bruising deceleration in economic activity that China has endured. Australia’s stock market fell 1.6 percent on Tuesday.Stock markets in commodity-exporting countries continued to suffer losses as traders worry that demand for their goods may decline if more countries suffer the kind of bruising deceleration in economic activity that China has endured. Australia’s stock market fell 1.6 percent on Tuesday.
The price of a barrel of benchmark American crude oil dropped more than 1 percent, to less than $51 on Tuesday. Oil prices have dropped about 17 percent this year, as investors have anticipated the weekslong immobilization of China’s economy, the world’s second largest.The price of a barrel of benchmark American crude oil dropped more than 1 percent, to less than $51 on Tuesday. Oil prices have dropped about 17 percent this year, as investors have anticipated the weekslong immobilization of China’s economy, the world’s second largest.
China consumes more crude and commodities than any other country. Prices of those commodities have also fallen, dragging down the share prices of mining, chemical and fertilizer companies.China consumes more crude and commodities than any other country. Prices of those commodities have also fallen, dragging down the share prices of mining, chemical and fertilizer companies.
Keith Bradsher and Jeanna Smialek contributed reporting.Keith Bradsher and Jeanna Smialek contributed reporting.